Do you ever notice how some entrepreneurs seem to get all of the spotlight? Or wonder how they get the referrals, the press interviews, the cross-promotions and, ultimately, the lion’s share of the market? Well, after a recent conversation with Derek Coburn, I’m convinced any entrepreneur can make this a reality for their business.
Derek is a financial advisor who runs his own wealth management practice. With the help of his wife, Derek also founded CADRE, an “UnNetworking” community in Washington D.C., and is most recently the author of the book, Networking Is Not Working. In our chat, Derek shared with me one of the most effective methods of becoming the most successful (and popular) entrepreneur in your industry that I’ve ever seen. And it’s simple, consisting of just 3 steps. Here are some highlights from our conversation:
The “Ultimate Tie-Breaker,” Or How To Stand Out From Other Entrepreneurs
“I was having a conversation with a client, who I refer to in the book as David the landscaper,” Derek said. “And he told me one of his landscaping clients asked him to take a meeting with his brother-in-law, who was a financial advisor. David reiterated how much he liked me and he wasn’t looking to make a change, but his client said that was no problem and he’d be doing a favor just by taking the meeting. So after the meeting David called me to tell me what went down.”
Already you can tell that Derek’s clients are very loyal, and you’re about to see why. Derek continued, “Forty-five minutes into this guy’s presentation, he showed a hypothetical portfolio and said ‘If you would have invested with my firm over the last three years instead of with Derek, you would have earned 2-3% more per year. And my client’s response was, ‘Well, over the last year Derek has referred me $2 million worth of business for my landscaping company. So in theory, if I look at it in the aggregate, he could have lost half the money in my portfolio and I still would have been better off working with him.’ And that was a big ‘aha’ moment for me.
“I started looking at networking as a combination of client appreciation and client service mixed with business development. And that led to me being able to create opportunity and value above and beyond what they were expecting from me as an investment advisor.”
3 Steps To Becoming The Most Popular Entrepreneur In Your Industry
All the trials and triumphs of building a business – delivered to your inbox.
Around 2008, when the economy nose-dived, Derek’s understandably worried clients needed more time and attention. He didn’t have the time to go to networking events and meet new people, which he felt were usually a waste of time anyway. So, taking a lesson from his experience with David the landscaper, he built a new system for delivering value to his current clients while growing his network and referrals. Here’s how Derek does it, in 3 simple steps:
Step #1: Identify Trigger Phrases And Events
In John Jantsch’s book, The Referral Engine, he discusses a concept called “Trigger Phrases.”
These are phrases people use that could indicate they’re a good prospect for your business. Derek takes this one step further to “Triggering Events.” In the financial advisor world, a triggering event might be having a baby or buying a house. For my business, Wealth Factory, a Triggering Phrase or Event might be an entrepreneur who says they’re thinking of selling their business, or is overloaded in debt payments or wants to create a responsible family trust for the next generation.
For your business, step one is to identify what triggering phrases or events might indicate that a person is a good prospect for you. It’s worth putting some serious thought into this, as Trigger Phrases/Events can be unique to each industry, which Derek illustrates with this example: “An owner of an IT company told me that a good perspective client is anyone that has a beige server. Because if somebody has a beige server, it likely means that they don’t have updated products or updated technology.”
Step #2: A 15-Minute Phone Call
“If you ask what’s the number-one thing that you can do for your clients today, everyone will immediately default to providing a higher level of service or lowering their fees,” Derek said. “When in reality, the best thing that any of us can do for our clients today is refer them a customer for their business. I had a lot of clients, but I didn’t know specifically who their ideal customer was. So I would send them an email and say ‘Hey, I want to jump on a 15-minute call with you to ask some questions about your business.’ During that interview I would ask, “What is the role of the person who typically hires you? Where and with whom do they typically spend their time? What problem(s) are they primarily looking to solve that you can help with? And how will I know if I come across a good opportunity for you?”
Derek then asks if there are any trigger phrases that would indicate a person would be a potential client, which leads to a golden opportunity: “A lot of them have never even thought about that for their business, so they’ll say ‘Can you give me an example?’ Then the examples that you can give are the triggering events for your own business. So now it becomes an opportunity for you to tell them what a good client for you looks like, while also educating them on the importance of why they need to do this as well.
“My purpose for having these conversations with my clients is to frame myself as somebody that, in addition to providing the core service that they expect of me, will also be looking to get referrals for them. And it just does so much in the way of cementing that relationship. Every time that I’ve had one of these conversations my client has just been completely blown away.”
Step #3: Host Lunch And Wine Events
“Now you know what a great client for them looks like,” Derek said, “and then that ties in nicely with hosting your first lunch. You reach out a week later and say, ‘After our conversation, I realized that there were people in my network that would be good for you to meet. I’m going to be putting together a lunch for about 10 or 12 CEOs and business owners and wanted to invite you to join me.’ I got to the point where I was doing 2 or 3 of these a month, because clients would come see the value and then they would invite other people.
“Now I’ve hosted over 500 of these roundtable lunches where you’re getting people to talk about their business and their challenges and how other people can help them. You make them pitch-free, but at the same time, people end up doing business together because they have their guard down knowing they’re not going to be sold. They end up reaching out to someone else to say, ‘Hey, I’m really intrigued by your business and what you do. I would like to know more,’ and it’s not the other way around.”
Derek also has an interesting, and powerful, tweak on customer appreciation events: “The other thing that I did was wine tasting events. A lot of people do different kinds of client appreciation events, but they always limit it to clients. So what I did was invite my best clients to come to a wine tasting event, and their invitation would be for them and a guest. I’d begin each wine tasting with a ten minute presentation that was not a pitch, but was on some topic that would be of interest to my clients and also their guest.
“So I wasn't pitching, but I didn’t have to pitch because my clients were doing the pitching for me. And I was what everyone had in common. If Client A brought a guest, that guest might ask Client B what brought them to the event, and Client B would say, ‘Well I’ve been working with Derek for 5 years.’ So every conversation would start with and involve me and my practice. I would end up disrupting the relationship that guests had with their existing financial advisor because they’d come to a wine tasting event and they’d think in the back of their head, ‘Why doesn’t my advisor ever invite my friends and my colleagues to fun events?’
“I wasn’t charging for these events because it was first and foremost to add value for existing clients. And I ended up generating $150,000 of brand new recurring revenue after doing 4 wine tastings the first year. There were some wine tasting events that I hosted where it didn’t lead to a guest immediately becoming a client or ever becoming a client, but I would still argue that it was time and money well spent because I was investing in my existing relationships.”
Derek has come up with the term Networking 3.0 to describe his suggested approach to networking. Networking 1.0 was networking with the primary purpose of benefiting yourself. Networking 2.0 was about providing value for new contacts, which is good, but risky if that means introducing someone you don’t know to your current contacts and clients. Networking 3.0 is focusing on your best existing relationships and looking for ways to identify opportunities for them while developing new relationships.
Derek highlights and expands on this 3-step process and Networking 3.0 in his new book, Networking Is Not Working.
